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By XE Market Analysis March 31, 2014 3:14 pm
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    XE Market Analysis: Asia - Mar 31, 2014

    FX Trade was relatively quiet to end the quarter in N.Y. on Monday, with the dollar mostly lower overall. Equities surged on month-end window dressing, while Treasury yields plied fairly narrow ranges. EUR-USD found resistance over 1.3800, and into the ECB meeting, and we look for a top near the figure, as traders price in some ECB easing. The pairing touched a.3808 highs, and put in a floor at 1.3763. USD-JPY meanwhile, touched 103.43 highs, though succumbed to profit taking, resulting in a move to 102.89. USD-CAD slipped after Better Canadian GDP data, though later inched higher again.

    [EUR, USD]
    EUR-USD gains stalled over 1.3800 by mid-morning, and headed moderately lower through the remainder of the session. Given the inflation backdrop in the EU, some will likely bet on further ECB easing measures on Thursday, and as a result, we look for the euro to gradually slip lower this week. EUR-USD found a floor of 1.3763 in early afternoon trade, and turned sideways in a narrow band into the close.

    [USD, JPY]
    USD-JPY ran out of buyers over 103.40, and eased lower into the London close. London profit taking appeared to be the driver following the softer Chicago ISM print. With Japan's year end out of the way, and risk appetite at firmer levels on Monday, talk was that Japanese accounts would be quick to sell yen on modest upticks. The pairing later touched 102.89 lows, though again reclaimed the 103 handle. A mix of Japanese and option backed buyers was reported under the figure, with talk of 104 and 105 strikes noted. A break over March 7 highs of 103.76 should bring the 104 mark into focus.

    [GBP, USD]
    Cable made its way to 1.6649 highs in N.Y., though overall was held to a 50 point trading range through the session. There was little reaction to the as-expected U.K. GDP data in London, though the U.K. economy continues to show resilience. Cable will likely find support into 1.6600 near term.

    [USD, CHF]
    EUR-CHF has steadied back toward the 1.2200 level after making a one-month peak of 1.2234 on Wednesday. The up move reflected further unwinding of the Swiss franc's safe-haven premium. The cycle low of 1.2104 was left unchallenged during the recent risk-off phase. We see potential for a recovery to the 1.2300-1.2400 area, but this assumes there are no renewed flare-ups in geopolitical tensions.

    [USD, CAD]
    USD-CAD dipped to session lows of 1.1002 from 1.1030 after the stronger Canadian GDP data. Buyers stepped in ahead of the figure, with a band of standing bids noted at 1.1000-1.0990.The pairing later bounced to 1.1056 highs, though the firmer risk backdrop and still strong oil prices should limit upside overnight.

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